~ An Aussie look at Financial markets-Been in the Biz for over 30 years!

Monday 18th February – Australian Market Wrap

ASX 200 up 24 to 6090. US futures up 17. US markets closed this evening. After a rush of blood at the opening, the market drifted back with no US markets tonight and a big scorecard of results.77 of the ASX 200 report this week. Not a great start with BOQ disappointing, BIN gone after a profit downgrade, SIQ underwhelming and NHF warning of fewer people interested in private health insurance. Banks drifted into the red but closed mixed with healthcare and miners providing the support for the day. Energy stocks also did well following oil price rises. AUD slightly higher at 71.52c

Todays Highlights

ASX 200 fails to hold 6100 closing up 18 at 6084.

High 6116 Low 6074. Range narrows.

Miners continue to push higher but banks see selling again in spots..

Energy stocks in demand on crude price.

Healthcare better led by CSL.

Results dominate.

AUD steady at 71.52c

Bitcoin rises to US$3676

Aussie Gold firms to $1851

US futures up 17. Markets closed tonight.

Asian markets stringer with Japan up 1.8% and China up 1.7%

STOCKS IN FOCUS

TWE -4.26% loses top executive to rival.

GWA +4.38% positive results.

BRG +2.64% broker upgrades. All-time highs.

ANN +4.09% good results and easing price pressures.

ELD +3.45% bargain hunting.

SAR +3.21% good drilling results from Carouse Dam.

NWL +7.00% half yearly results.

HLO -7.01% is it me you’re looking for. Downgraded earnings guidance.

LOV -2.68% profit-taking.

RHP +10.03% good results.

EXL +5.80% buying continuing.

SPT -4.22% profit-taking continues.

ALU +0.26% results after hours.

Z1P +5.15% seeing ‘value’ buying.

AMP -1.38% changes to superannuation.

ATS -5.00% placement.

WOW +0.70% stops selling $1 a litre milk.

CCL -0.83% writes down SPC to zero value.

LMW -10.59% resumes trade after a data breach.

Speculative stock of the day: Bionomics (BNO) +% the company announced further analysis of its Phase 2 PTSD trial results.

Biggest Risers – AHG, NWL, PNI. KMD, GWA and NWH.

Biggest Fallers – BIN, SIQ, HLO, BOQ, BVS and SSM

TODAY

Bingo Industries (BIN) –49.13% Trading update and significant downgrade. Underlying EBITDA is now expected to be in line with last year, versus prior guidance of EBITDA growth in the 15-20% range. A faster-than-expected softening in residential construction activity, no price increases which were previously expected, and a reconfiguring of development projects, are the catalysts for the revision.

Coca Cola Amatil (CCL) –0.83% SPC update on divestment. The company has received a number of bids from both Australian and overseas parties but has decided to make a non-cash impairment of $146.9m as the carrying value of the net assets. This will now value SPC at zero. CCL expected a full year underlying earnings before interest and tax loss for SPC of approximately $10m for FY18. This has not changed. As a result of the non-cash impairment of SPC and the trading loss for the year, the reported loss in “Discontinued Operation” will be a total loss of approximately $120m after tax.

Netwealth Group Limited (NWL) +7.00% Result looks like a beat. First-half NPAT came in at $17m vs consensus of $16.6m. Revenue and underlying EBITDA also surpassed estimates at $48.2m and $24.8m respectively. An interim dividend of 5.5cps was announced. NWL remains confident that FY FUA net inflows in FY19 will be greater than FY18. The EBITDA margin is anticipated to remain at a similar level to FY19. Regarding the RC fallout, NWL also notes less than 3.5% of FUA is subject to grandfathered commission.

NIB Holdings (NHF) –2.41% Revenue up 9% to $1.205m Net profit up 5% to $74.5m. Interim dividend 10c fully franked. Guidance to be at least $195mvs prior guidance of at least $190m. NHF does not anticipate H2 of FY19 to be as strong as the first.

Woodside (WPL) +2.30% Peter Coleman has told the market he intends to stick around for at least another 3 or 4 years to see WPL deliver at least one of its major projects. These include Scarborough, Pluto-2 and the Browse LNG projects in WA. WPL ex-dividend this week.

GWA Group (GWA) –4.38% First half NPAT came in at $26.6m vs consensus of $25.5m. Revenue and EBITDA came in just short of estimates at $182.6m and $41m respectively. An interim dividend of 9c per share was announced. GWA expects normalised continuing EBIT in the second half to be similar to H1.

Westpac (WBC) +0.15% 1Q update. Underlying statutory profit for 1Q is $1.95bn which is bang in line with the quarterly average of the second half 2018. Cash earnings of $2.04bn. NIM was higher. The bank took a $204m impairment charge. Expenses were lower though due to the exit of the Hastings business and no additional remediation costs. CET1 at 10.4%. Stressed assets were little changed and no new loans over $10m have become impaired. Mortgage delinquencies were only 4bps higher. First-half result 6th May.

Ansell (ANN) +4.09% EBIT $60.7m adjusted EBIT of $87.65m up 3.9%. EPS of US28.6c. interim dividend US20.75c. Outlook: FY19 EPS for Ansell’s continuing businesses is now expected in the range of 106¢ -112¢. Improved EBIT to Sales Margins are expected in the second half of FY19 with the benefit of selling price increases plus the realisation of cost savings from the transformation program. Original guidance of 100c -112c so this looks like a small upgrade although it does include a 4c benefit from the buyback being completed.

ECONOMIC DATA – Nothing significant

Local political parties have been hit by a cyber attack.

JP Morgan says an RBA rate cut is a bridge too far.

BOND MARKETS

2-Year bond yields unchanged at 1.74%

5-Year yields up3 bps to 1.77%

10-Year yields down 1bps to 2.13%

ASIAN NEWS

Singapore’s non-oil exports fell at the fastest rate in more than two years in January

EUROPEAN AND US NEWS

British intelligence has concluded that it is possible to mitigate the risk of using Huawei equipment in 5G networks.

UK -Japan trade talks have turned nasty after a letter from one minister added to tensions.

Follow the money, as with all thing political the bookies tend to get it correct. At the moment the bookies and the market believe that Brexit is no longer a significant issue. May should get some sort of offer from the EU to sweeten it and some bland Brexit -lite will eventuate. EU has more problems with a looming recession in some countries that it does not need a hard Brexit. The UK is the worlds 5th biggest economy. Not one you can lose if you flog Audis and Mercedes.

And finally……………

A young man goes into a chemist to buy condoms.

The pharmacist says the condoms come in packs of 3, 9 or 12 and asks which the young man wants.

“Well,” he said, “I’ve been seeing this girl for a while and she’s really hot. I want the condoms because I think tonight’s “the” night. We’re having dinner with her parents, and then we’re going out. And I’ve got a feeling I’m gonna get lucky after that.” “Once she’s had me, she’ll want me all the time, so you’d better give me the 12 pack.”

The young man makes his purchase and leaves.

Later that evening, he sits down to dinner with his girlfriend and her parents. He asks if he might give the blessing and they agree. He begins the prayer, but continues praying for several minutes. The girl leans over to him and says, “You never told me that you were such a religious person.”

The boy leans over to her and whispers, “You never told me that your father is a pharmacist.”